How collaboration is creating value on the seabed

Today, the UK offshore wind sector meets around 6% of our annual electricity demand and is on track to hit 10% by 2020. As a nation, we’re leading the field in this area, with around the same number of offshore wind turbines in UK waters as across the rest of Europe combined. Yet less than twenty years ago, this market was in its infancy, and as manager of the UK seabed, The Crown Estate worked to understand how to unlock commercial value for the business offshore.

Even as recently as the millennium, when the first wind turbines were installed in UK waters, investment in the sector was a challenging proposition, with costs remaining comparatively high, the supply chain patchy and the technology young. Alongside all this, prospective developers were starting from scratch on the wealth of research required to begin assessing a project’s viability, which covers everything from weather data, to seabed conditions and habitat studies.

Effectively as seabed landlord, with rights to award commercial leases for renewable energy projects offshore, The Crown Estate took a proactive approach, working to bring the industry together and encourage collaboration, to help de-risk the planning process and attract investment. In doing so, we helped to make the seabed a more productive asset, both to us as a business and to UK PLC.

As part of this approach, the Marine Data Exchange (MDE) was born, providing a platform for offshore energy customers and prospective developers to store, manage and share the data collected throughout the lifecycle of a project, from feasibility and consenting, through to construction and operation. This resource, the first of its kind in the world, gives anyone with an interest in the marine environment free access to a pool of shared research, and by enabling collaboration, has helped to de-risk investment offshore.

Today, the MDE is one of the world’s biggest sources of offshore renewable data, with 1,000 new surveys added over the last three years. 68% of all survey work completed by The Crown Estate's renewable energy customers is now freely available via the platform, and includes not just offshore wind projects but wave and tidal and marine aggregates research too.

Over 7400 datasets were downloaded from the site last year by a growing audience of consultants, developers and academics, as well as visitors from Government, NGOs and financial bodies. It’s also increasingly attracting interest across the world, with users logging in from countries including the USA, Canada and the Netherlands, home to one of the most mature markets in the sector.

Since those early days, we’ve seen huge advances within the UK’s offshore wind industry, in technology, capacity, delivery time, and most importantly price. The average lifetime cost of energy agreed for projects that reached final investment decision in 2016 was £97 per megawatt hour, already well below the industry’s target of £100, set for 2020. A year later, the Contracts for Difference auction held in September 2017, delivered a strike price of £57.50, making the technology truly cost- competitive with other low carbon energy sources for the first time, and besting prices agreed for new nuclear schemes, including the Hinkley deal.

Moreover, there is every expectation that the next generation of offshore wind projects will come in even lower, reaching prices beneath those agreed for new nuclear schemes, including the recent Hinkley deal.

The wealth of data that has built up over the lifetime of the projects now in operation on the seabed, consolidated to the Marine Data Exchange, has a continuing role to play in helping support the future of the industry on its path towards maturity, and for us as landlord, helps to make best use of the prime real estate beneath UK waters.

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